The Battle for a Place in China’s Bank Card Market

On : December 29, 2017

The year’s long attempt to enter the Chinese market by credit card companies is moving slowly forward, but not necessarily in the way desired by companies like MasterCard and Visa. Applications to the People’s Bank of China have yet to yield a ruling, but there is pressure to arrange joint ventures with established Chinese companies, a requirement for other financial sector players. On one hand joint ventures are challenging for companies that have massive, independent, worldwide operations. On the other hand, linking with existing Chinese networks opens the door to customers more quickly. Regardless of which way it goes, government supported UnionPay will be the dominant force in the country, which leads to the thought that half a loaf is better than no loaf at all in what researcher, GlobalData, says will be the number one bank card market by 2020. Source: Reuters

Views They Are-a Changin’

On : December 28, 2017

The movement away from scheduled TV watching is changing as alternative video ad carriers, in all forms, are on the rise. Whether it is streaming, on demand or over-the-top (OTT) viewing, it is gaining a share of audience time and attention. And ad viewing rates via these alternatives appears to be strikingly high. Source: Broadcasting & Cable

China’s Inflation Rate Remains Steady

On : December 27, 2017

China’s inflation rate has been slinking along since August. It’s essentially flat, which is a good thing because flat at this modest rate means stability. An explanation given for the slight month-to-month movement is that food costs dropped a little more than non-food costs increased. Sources: Trading Economics; National Bureau of Statistics, China

Pressure on all Players to Fix Programmatic Advertising

On : December 26, 2017

A survey of 300 senior marketers by the CMO Council in coordination with Dow Jones highlights the concerns marketers have regarding brand security in a programmatic world.

Responding to these data, the report says, “When consumers were asked about their reaction to seeing the brands they love being associated with inappropriate or questionable content, the answer was clear: Customers will walk away with their wallets—even if it means walking away from their most beloved brands. Brand security and integrity in advertising are not simply reputation issues anymore, they can directly impact the bottom line.”

Liz Miller, SVP of the CMO Council suggests, “Where agencies go wrong is if they interpret this to mean marketers want more services. This is not about services and execution this is about strategy.” Brands and agencies have to talk about context and adjacencies. Then agencies have to work with their network allies to deliver on the promise. Sources: CMO Council and Dow Jones

Another Month, Another 8 Million Mobiles

On : December 22, 2017

November saw the replacement process continue in China. This month grew by 8.2 million units, one million more than the 7.2 million year-to-date average, which was one third the size of last year’s average of 21.7 million a month. The growth is not as dramatic as the past, but it is unrelenting. Given that Chinese consumers use their phones much more than their computers, the continuing drive to upgrade is not surprising. Sources: China Mobile, China Unicom, China Telecom

Follow the Money

On : December 21, 2017

When Winterberry Group, the Interactive Advertising Bureau (IAB) and the Data & Marketing Association (DMA) combined to examine how US companies will spend more than $10 billion on third-party audience data, they discovered three key types of spending being done to chase audiences.

Advertisers are spending the most on omni-channel data, a “category includes personally identifiable information like name, address and email, along with more general data such as interests and behavior.”

That’s followed by transactional audience data, which “is related to the purchase history by audience groupings that is intended to aid with market segment targeting.”

Digital behavior data “includes information like IP addresses and device IDs that provide insight into how users behave on digital devices and channels.”

While data are key, the deluge requires some serious number crunching to get the required result, otherwise audience chasing can quickly become a messy waste of billions. Source: eMarketer

The Big Kahuna

On : December 20, 2017

According to projections by McKinsey & Co. the number of the China’s middle income households will grow more than 170% in the next fifteen years, reaching to 315 million. To put that into perspective, million middle income households in the US in 2016 reached almost 63 million, a little more than half the number in China. No one expects US middle income households to grow at 170% clip in the next fifteen years. If anything, the US middle income households have been in slight decline in recent years. The size of China’s middle class and its continuing growth are the things that make selling into China worthwhile, in spite of some cultural differences. Source: McKinsey & Co.

The Proven Value of Trustworthy Accountability Group (TAG)

On : December 19, 2017

Six and a half billion display and video impressions were examined in a study from The 614 Group.Their results found that impressions moving through TAG channels had reduced fraud by 83% versus the industry as a whole.

“This study validates TAG’s approach and sets a clear path for marketers that want to protect their brands and ad spend from fraud,” said Mike Zaneis, President and CEO of TAG. “Fraud thrives in the dark crevices of the supply chain, so we knew that we had to get the legitimate participants in the supply chain to adopt the same high standards for this effort to be successful. When the industry links its arms and stands together, there is no place left for the criminals to hide.”

Conclusion: If brand safety and honest transactions matter, TAG certified channels are the way to go. Source: MarketingLand

China’s Service Sector Improves Again

On : December 18, 2017

The service side of the ledger in China is looking pretty healthy for the fourth quarter after two substantial monthly jumps upward. The Index is climbing back toward its 13-month average of 52.2. China’s service sector is important because little if any of it ties back to the government as compared to the mixed, state and private, economy of the manufacturing sector. The service sector also represents local sales – consumers – where the manufacturing sector is not necessarily the result of local activity. More local spending is good. Source: Chinese HSBC Services PMI, Markit Economics

Modest PMI Decline

On : December 15, 2017

Tepid new orders, domestic and export, have led to a marginal decline in the Manufacturing Purchasing Manager Index. Notable is a sizable increase in input costs and a corresponding increase in selling prices.

Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin stated, “For the most part, the manufacturing sector remained stable in November, although some signs of weakness emerged. In Q4, the economy is likely to maintain the stability observed since the start of the second half of the year. Economic growth in 2017 is expected to be higher than last year, but it may come under downward pressure in 2018.” Source: Markit Economics